1978 (12) TMI 14 - HC - Income Tax

Income Tax Act, Limitation For Completing Assessment, Provisions Of I.T.Act, Super Profits Tax

Summary

Issues:
Assessment under the Super Profits Tax Act, 1963 for the year 1963-64; Jurisdiction of the ITO to pass an assessment order beyond four years from the end of the assessment year; Interpretation of Sections 4, 5, 6, and 9 of the Act; Comparison of provisions of the Super Profits Tax Act with the Income Tax Act, 1961; Applicability of time limits for assessment proceedings under the Act.

Analysis:
The judgment pertains to the assessment under the Super Profits Tax Act, 1963 for the year 1963-64. The central issue revolved around the jurisdiction of the Income Tax Officer (ITO) to pass an assessment order beyond four years from the end of the assessment year. The assessee contended that the assessment order dated July 29, 1968, was beyond the permissible time limit. The court analyzed Sections 4, 5, 6, and 9 of the Act. Section 6 outlines the return of chargeable profits to be filed by the assessee, while Section 9 deals with the procedure for assessing profits escaping assessment. Notably, neither Section 6 nor Section 9 prescribes a specific time limit for the ITO to complete assessment proceedings.

The judgment compared the provisions of the Super Profits Tax Act with the Income Tax Act, 1961. It highlighted that the Income Tax Act, 1961 contains Section 153, which expressly prescribes time limits for making an assessment order. However, the Super Profits Tax Act does not have a similar provision. The court emphasized that the legislature intentionally excluded the applicability of Section 153 of the Income Tax Act, 1961 to the assessment proceedings under the Super Profits Tax Act, as evident from Section 19 of the Act.

The court rejected the argument that there was an implicit limitation for completing the assessment within four years under Section 9(b) of the Act. It emphasized that in the absence of an express provision limiting the time for assessment proceedings and considering the deliberate exclusion of Section 153 of the Income Tax Act, 1961, it was not permissible to imply such a limitation. Consequently, the court answered the question in the affirmative, ruling in favor of the department. The judgment concluded that the department was entitled to costs of the reference, including counsel's fee.